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Oneok to build $1.4bn NGL pipeline system in US Rocky Mountain region

EBR Staff Writer Published 05 January 2018

Oneok has revealed its plans to build a new 1,448km long pipeline and associated infrastructure to transport natural gas liquids (NGLs) from the Rocky Mountain region to its existing Mid-Continent NGL facilities.

The pipeline project, which will built with a cost of about $1.4bn, is expected to boost Oneok’s NGLs takeaway capacity out of the Rocky Mountain region.

The US midstream service provider said that the 20inch diameter pipeline named as the Elk Creek Pipeline will have a capacity to transport 240,000 barrels per day (bpd) of unfractionated NGLs.

With additional pump facilities, the NGL pipeline will have the capability to be expanded to 400,000bpd, stated Oneok.

Slated to be ready by the end of next year, the new pipeline will transport the NGLs from near the company's Riverview terminal in eastern Montana to Bushton in Kansas.

Oneok president and CEO Terry K. Spencer said: “The existing Bakken NGL and Overland Pass Pipelines are operating at full capacity. Additional NGL takeaway capacity is critical to meeting the needs of producers who are increasing production and are required to meet natural gas capture targets in the Williston Basin.

“The Elk Creek Pipeline will strengthen Oneok's position in the high-production areas of the Bakken, Powder River and Denver-Julesburg regions and also provide additional reliability and redundancy on our NGL system.”

The pipeline is anchored by 10-15 years of long-term contracts totaling around 100,000bpd, supported mainly by minimum volume commitments.

Oneok says that the Elk Creek Pipeline is part of its $3.0-3.50bn of potential capital-growth projects. The company expects to announce additional projects on similar lines as the Elk Creek Pipeline once they secure adequate supply commitments.

In October 2017, Oneok’s joint venture with Martin Midstream Partners announced an investment of around $200m to expand the West Texas LPG Pipeline into the Delaware Basin.

The West Texas LPG System expansion, which includes the construction of a 193km pipeline lateral, is expected to be completed in the third quarter of this year.

Image: Oneok’s new pipeline will grow its NGLs takeaway capacity out of the Rocky Mountain region. Photo: courtesy of supakitmod/FreeDigitalPhotos.net.